OECD Forecasts India To Grow Fastest Among OECD Members, Raises Projection To 12.6% For FY22

The biggest upgrade of the growth projection for this year is for India, the Organization for Economic Co-operation and Development in its latest Interim Economic Outlook report said. The country's growth outlook was boosted to 12.6 percent, the fastest among OECD members, from 7.9 percent. The Organization for Economic Co-operation and Development said the global economy is set to grow at a faster pace this year than projected earlier due to an accelerated roll-out of vaccinations against the coronavirus and a better outlook for the U.S. on the back of a huge stimulus boost.

The Paris-based think tank raised the global GDP growth forecast for this year to 5.6 percent from 4.2 percent seen in December in its latest Interim Economic Outlook report. The global economy is projected to expand 4.0 percent in 2022, which is faster than the 3.7 percent forecast in December. World output is expected to reach pre-pandemic levels by mid-2021, but the pace and duration of the recovery will depend on the race between vaccines and emerging variants of the virus, the OECD said.

The OECD raised the US growth projection to 6.5 percent from 3.2 percent seen in December. The upward revision partly reflects the large fiscal stimulus planned with a sustained pace of vaccination, the group said. The US growth projection for next year was raised to 4.0 percent. Eurozone growth forecast for this year was also upgraded to 3.9 percent from 3.6 percent. The vaccination is slower and stimulus is lower in the single currency bloc, the think tank noted. Among the big four, projections were lowered for France and Italy.

China's GDP growth projection for this year was lowered to 7.8 percent from 8.0 percent. Regarding the monetary policy, OECD said the current very accommodative stance should be maintained. Policymakers should allow temporary overshooting of headline inflation provided underlying price pressures remain well contained, with macroprudential policies deployed where necessary to ensure financial stability, the group added.

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